The economic impact of tourism in Central Finland: a regional input–output study

Abstract

PurposeThe purpose of this study is to examine the total economic impact of tourism at the regional level in Central Finland. This paper aims to clarify the extent to which tourism contributes to regional output, employment, income and taxes in tourism-related sectors.Design/methodology/approachThis study is based on a regional input–output analysis. The author calculates the effects of tourism on regional output, demand, wages, employment and national and regional taxes in Central Finland.FindingsThe author’s regional input–output analysis reveals that tourism has a substantial impact on production in Central Finland (including the direct and indirect effects of consumption by tourists in different sectors). Moreover, the effects of tourism expenditures on employment and residents’ incomes in tourism-related sectors in Central Finland are quite significant.Research limitations/implicationsMany limitations of this study stem from the assumptions of the input–output model. Other limitations relate to the analysis of the impacts of tourism on household taxes, savings, consumption and net income. Our study uses average figures, which may overstate the effect of tourist expenditures on taxes because tourism jobs are often low paying.Practical implicationsThe study yields results that can be used to frame regional policy. The results may be useful for policymakers in planning for tourist attractions. Furthermore, local authorities may use the results to guide decisions regarding infrastructure investments or improvements to the operating environment of tourism industries.Originality/valueMany studies analyse the economic impact of events at the regional level using input–output analysis. National-level tourism impact studies using the input–output technique have also been conducted. Studies focussed on the economic impact of tourism at the regional level typically examine the macroeconomic (income, output and employment) effects of tourism. Consequently, these studies have focussed on estimating output, employment and income multipliers (Mazumder et al., 2012). The author’s contribution is a regional input–output analysis of direct and indirect impacts of tourism expenditures on production, demand, wages, income and employment in the whole economy at the regional level (in Central Finland). The author also analyses the impacts of tourism on national and regional taxes. The results of this study could be used by planners and policymakers involved in regional planning and development.